Indolmycin is an antibiotic substance first produced by fermentation from Streptomyces albus (U.S. Pat. No. 3,173,923) and later synthesized by Schach von Wittenau (J. Am. Chem. Soc. 83, 4678 (1961); ibid. 85,3425 (1963)). Related antibacterial compounds are taught in U.S. Pat. No. 3,320,282 and other related compounds having antiviral and antibacterial activities are taught in U.S. Pat. No. 4,049,816. It has now been discovered that a series of novel derivatives of indolmycin possess antibacterial activity, and that certain of these derivatives serve as prodrugs of the parent compound. A novel and highly advantageous process has also been discovered to produce indolmycin and these compounds.